International Monetary Fund (IMF) - Housing TV Africa

IMF Says Tinubu’s Economic Reforms Have Yet to Ease Poverty in Nigeria

housingtv — Fri, 18 Apr 2025 18:12:27 +0000

Nearly two years into President Bola Tinubu’s ambitious economic overhaul, the International Monetary Fund (IMF) has acknowledged the efforts made by Nigeria’s government, but says the impact on ordinary citizens remains limited.

In a statement released Friday, IMF Mission Chief for Nigeria, Axel Schimmelpfennig, noted that while steps taken by the Tinubu administration have improved the country’s macroeconomic position, poverty and food insecurity continue to affect millions.

“The government has taken important steps to stabilise the economy, enhance resilience, and support growth,” Schimmelpfennig said, following a routine visit during which IMF officials met with Nigerian policymakers and civil society groups.

“But these gains have yet to benefit all Nigerians,” he added.

Since taking office in May 2023, President Tinubu has rolled out sweeping reforms aimed at reviving Nigeria’s struggling economy. These include the removal of long-standing fuel subsidies, the liberalisation of the naira, and halting Central Bank funding of fiscal deficits. While the changes were welcomed by international lenders as necessary, they have also pushed living costs sharply upward—squeezing the budgets of millions of families.

The IMF cautioned that Nigeria’s economic future remains uncertain, citing falling global oil prices and ongoing global instability as potential headwinds. Still, Schimmelpfennig said that the country is now better positioned to weather such challenges, thanks to recent reforms.

Critics of the government’s approach argue that while the reforms might strengthen fiscal discipline in the long run, the short-term human cost—marked by spiking inflation and reduced purchasing power—has been severe.

According to a World Bank report from late 2024, more than 129 million Nigerians—over half the population—now live in poverty, with food prices and transportation costs driving the worst cost-of-living crisis in a generation.

While the government insists that reforms are necessary and long overdue, the pressing question remains: how soon will the benefits reach the people who need them most?

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Pension Power: Nigeria’s N5.51trn Boosting Real Estate Sector Growth

housingtv — Wed, 09 Apr 2025 14:44:11 +0000

Pension Funds Driving Economic Momentum
Nigeria’s pension industry is now a major force in the country’s economy. So far, N5.51 trillion has been invested in vital sectors like infrastructure, real estate, and private equity. These investments are focused on boosting long-term growth in the real sector.

Strong Growth in Pension Asset Value
The Director General of the National Pension Commission (PenCom), Omolola Oloworaran, shared this update on Tuesday during a meeting with the International Monetary Fund (IMF). The meeting was part of the IMF’s 2025 Article IV Consultations in Abuja. Oloworaran was represented by Abdulrahaman Muhammad Saleem, the Head of PenCom’s Surveillance Department.

According to PenCom, the industry’s Net Asset Value (NAV) rose by 22.65%. It increased from N18.36 trillion at the end of 2023 to N22.51 trillion by December 2024. This rise is mainly due to additional contributions and solid investment returns.

A Roadblock: Limited Investment Options
Despite the progress, PenCom noted a major challenge. There are only 86 financial instruments in Nigeria that meet the requirements for pension fund investment. These instruments must be both liquid and publicly tradable. This small number limits the industry’s ability to diversify portfolios and boost returns.

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Although current regulations encourage wider investment options, the market has not produced enough qualifying assets. As a result, pension funds face restrictions in where they can safely invest.

PenCom’s Strategy for Broader Investment
To solve this problem, PenCom plans to partner with capital market operators. The goal is to increase the number of eligible financial products. This step will allow for better risk management and higher returns.

In addition, PenCom will promote investment in alternative asset classes. These include private equity, infrastructure, and other long-term projects. By doing so, the industry can build more balanced portfolios.

IMF Applauds Nigeria’s Pension Reforms
The IMF delegation welcomed these efforts. They praised PenCom for its strong regulation and oversight. They also noted the impressive growth in the pension sector and its role in supporting national development.

Looking ahead, PenCom says it will continue working with the Securities and Exchange Commission (SEC), the Debt Management Office (DMO), and the Pension Fund Operators Association of Nigeria (PenOp). Together, they aim to create a stronger and more sustainable pension system for the future.

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IMF Advocates Property Tax as Key Revenue Source for Governments

housingtv — Mon, 18 Nov 2024 10:52:30 +0000

The International Monetary Fund (IMF) has called on governments, particularly in low-income countries like Nigeria, to explore property taxes as a practical and sustainable way to boost revenue.

In a recent analysis, the IMF explained that taxing immovable properties, such as buildings and land, could help local governments tap into the wealth created through urbanization and construction. The report emphasized that property taxes are especially valuable for developing nations where collecting income and wealth taxes is often a challenge due to their mobility.

“Recurrent property taxes can help governments fairly generate revenue from the wealth created by construction-driven urban growth,” the IMF stated. “This is critical in countries where other forms of taxation are harder to implement.”

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The IMF report drew a striking comparison between advanced economies and emerging regions. While OECD countries collect over 1% of their GDP from property taxes, and some advanced economies collect up to 3%, countries in Africa and Asia generate just 0.1% of GDP from the same source.

To address this shortfall, the IMF urged governments to embrace modern tools like satellite imagery, drones, and geographic information systems to improve the mapping and valuation of properties. These technologies, combined with policy reforms, could increase property tax revenue in developing countries by up to tenfold, the report noted.

The IMF also recommended a phased approach, starting with simple area-based property tax systems before transitioning to market-value-based taxation. This method, already in use in cities like Delhi and Bangalore, could provide a practical and politically acceptable model for countries like Nigeria.

The report highlighted the political advantages of property taxes. Unlike national taxes, property taxes are collected and spent locally, making them less controversial. By linking tax revenue directly to public services like roads, schools, and waste management, local governments can foster greater transparency and accountability.

“Locally collected property taxes create a clear connection between what people pay and the services they receive. This can make such taxes more acceptable to citizens,” the IMF explained.

The IMF stressed the urgency of these reforms, estimating that governments worldwide need to raise an additional $3 trillion by 2030 to meet global development goals. For emerging markets, this translates to 4% of GDP, while low-income countries face the daunting task of raising 16% of GDP.

For Nigeria, adopting an efficient property tax system could provide a much-needed revenue boost to fund essential services, improve urban infrastructure, and support economic growth.

“Property taxes are not just a revenue tool—they’re a pathway to better cities and stronger economies,” the IMF concluded.

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Obasanjo Demands Overhaul of INEC, Urges New Leadership for Credible Elections

housingtv — Mon, 18 Nov 2024 10:05:54 +0000

Former President Olusegun Obasanjo has called on Nigerians to urgently push for the installation of credible leadership within the Independent National Electoral Commission (INEC). Speaking at the Chinua Achebe Leadership Forum at Yale University, Obasanjo emphasized that achieving electoral integrity requires appointing impartial officials with unblemished reputations. The veteran statesman, who delivered his keynote address on the topic “Leadership Failure and State Capture in Nigeria,” painted a grim picture of the nation’s current political landscape, which he described as being under “state capture.”

Obasanjo’s concerns were not limited to the electoral body; he expressed deep discontent with Nigeria’s judiciary, accusing it of falling prey to political manipulation. According to him, justice in Nigeria has become a commodity for the highest bidder, compromising trust in the legal system. He pointed out that this corrosion of judicial integrity fuels political impunity, with politicians openly taunting their opponents to seek justice in courts they already control.

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Addressing Nigeria’s economic decline, Obasanjo noted that the country’s GDP, which stood at $510 billion under former Finance Minister Ngozi Okonjo-Iweala, has plummeted to $199 billion during President Bola Tinubu’s administration, as per recent IMF data. He attributed the past economic resilience to the caliber of leaders in his government, singling out individuals like Okonjo-Iweala, the late Bola Ige, and Oby Ezekwesili. Obasanjo emphasized that reforms and skilled governance were responsible for Nigeria’s impressive GDP growth during his presidency, a period where annual growth reached up to 15.3% in some years.

Reflecting on the 2023 elections, Obasanjo deemed them a “travesty,” arguing that reforms must prioritize insulating elections from domestic and foreign interferences. He advocated for thorough vetting of electoral personnel, including the INEC chairperson, to ensure their independence and incorruptibility. To rebuild trust, he called for transparent and rigorous pre-election system checks, emphasizing the importance of safeguarding voting technology and ensuring that the electoral infrastructure is protected from tampering.

Obasanjo didn’t spare words in criticizing the misuse of technological tools like the Bimodal Voter Accreditation System (BVAS) and INEC’s Election Result Viewing Portal (IReV), which, despite their potential, were not properly implemented. He accused INEC of enabling voting irregularities by failing to utilize these tools as promised, likening it to “inviting the fox into the hen house.”

The former president also urged post-election audits and transparent procedures that ensure free and fair voting outcomes. He argued that any election where the actual votes are sidelined and winners are declared through manipulation undermines democracy and breeds instability. The increasing influence of wealth over judicial decisions, he asserted, turns the judiciary into an enabler of state capture—a situation where political and business elites subvert national interests for personal gain.

Expounding on state capture, Obasanjo explained that it involves covert alliances between powerful political and economic actors, facilitated through familial and business ties. He cited the continued dominance of one former state governor, who, even decades after leaving office, retains control over that state’s assets and governance. This monopolization of power, he warned, stifles competition and leaves public policies skewed towards select interests.

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The fallout from such entrenched corruption, according to Obasanjo, extends beyond governance and economic policy. It exacerbates societal challenges, driving Nigeria into a spiral of insecurity, violence, division, and underdevelopment. He closed his remarks by criticizing the current administration’s slow response and self-serving governance style, emphasizing that without immediate reforms, Nigeria risks sinking further into turmoil and economic despair.

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IMF Report Highlights Nigeria’s Struggling Economic Reforms and Rising Inflation

housingtv — Sat, 16 Nov 2024 08:02:14 +0000

The latest outlook report by the International Monetary Fund (IMF) for sub-Saharan Africa indicates that the broad-based economic reforms embarked upon by Nigeria’s federal government are yet to deliver significant positive impacts, even after 18 months of implementation.

The report, released yesterday, highlighted that while a few countries in the region have recorded some success in their reform agendas, Nigeria was notably absent from the list of achievers. Instead, Nigeria was included among countries failing to meet desired outcomes. According to the IMF, Nigeria’s economic growth rate, estimated at 3.19% for 2024, falls below the regional average of 3.6%.

Presenting the report at the Lagos Business School, IMF Deputy Director Catherine Patillo noted that while macroeconomic imbalances in the region are reducing with notable improvements in countries like Côte d’Ivoire, Ghana, and Zambia, Nigeria remains on the downside.

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Patillo stated that inflation is still a pressing issue for many countries, including Nigeria, where it stands at 33.8%—well above the target rate of 21% for 2024. After slowing briefly in July and August, Nigeria’s inflation resumed its upward trend in September and October, with analysts predicting continued increases in November and December.

The IMF also flagged Nigeria’s exchange rate instability and local currency depreciation as significant challenges. While foreign exchange pressures have eased in many sub-Saharan countries, Nigeria’s situation remains precarious.

Additionally, the report pointed out the burden of debt on fiscal stability, listing Nigeria among countries with low debt service capacity. It highlighted that interest payments in Nigeria and a few other nations absorb a significant portion of total revenues, leaving little room for development spending.

The IMF painted a mixed picture of the region’s economic future, with resource-intensive countries like Nigeria facing slower growth rates due to challenges in implementing reforms and policy adjustments. Political and social resistance were cited as obstacles hindering progress in resource-driven economies.

On the agricultural front, stakeholders criticized the federal government’s reform policies, describing them as largely aspirational with minimal implementation. The All Farmers Association of Nigeria (AFAN) acknowledged the necessity of reforms but called for better mechanisms to reduce the hardship on farmers. Meanwhile, ActionAid Nigeria emphasized that the reforms have yet to significantly address food insecurity, with the nation remaining one of the most food-insecure countries in 2024.

Policy analysts have urged the federal government to adopt a more people-centered approach to reforms, focusing on improving infrastructure, providing subsidies, and empowering small-scale farmers to achieve tangible results. They also recommended targeted measures, such as subsidizing organic agriculture, investing in climate-resilient crops, and reducing post-harvest losses through better storage and processing facilities.

While the reforms hold potential, experts agree that without comprehensive implementation and significant investment in critical sectors, the desired outcomes for Nigeria’s economy and food security will remain out of reach.

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IMF Urges Nigeria to Tap Into Property Taxes for Sustainable Economic Growth

housingtv — Wed, 13 Nov 2024 12:12:35 +0000

The International Monetary Fund (IMF) has identified property taxes as a crucial, yet vastly underutilized, revenue stream that could unlock sustainable development for Nigeria and other low-income countries. In a detailed blog post, the IMF outlined how effective property tax reforms, especially in economically vibrant cities like Lagos, could help local governments secure essential funds to support infrastructure projects and public services, ultimately driving economic progress.

The IMF’s analysis underscores the sheer scale of the challenge that emerging markets and developing countries face. To meet global development goals by 2030, governments worldwide must raise an additional $3 trillion. For emerging economies, this represents approximately 4% of their GDP, while for low-income countries, the figure soars to a staggering 16%. These figures point to a substantial funding gap that traditional revenue sources alone cannot bridge. This is where property taxes could play a transformative role.

Currently, property taxes contribute minimally to GDP in many low-income regions. African and Asian nations typically collect only about 0.1% of their GDP from property taxes, a stark contrast to the over 1% seen in OECD countries and nearly 3% achieved by some advanced economies. This discrepancy, according to the IMF, indicates significant untapped potential in regions like Nigeria, where revenue systems face both structural and implementation challenges.

The IMF’s report highlights that property taxes offer several advantages over other forms of taxation. One of the most compelling benefits is that they are inherently local in nature. Unlike broad-based national taxes that often trigger political and social resistance, property taxes are collected and spent at the local level, which can mitigate opposition and foster greater public acceptance. By creating a direct link between tax revenue and community services, property taxes enhance local accountability, showing taxpayers tangible benefits from their contributions.

The IMF also emphasized that property taxes are particularly suited for rapidly urbanizing nations where construction and real estate development are significant drivers of wealth. By effectively taxing this sector, local governments can capture the economic gains generated through urban expansion. This revenue can then be reinvested into public goods such as roads, schools, and health services, creating a virtuous cycle of growth and development.

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However, the path to implementing these reforms is not without obstacles. The IMF acknowledged the political challenges inherent in introducing new or higher taxes. Recent global examples demonstrate that tax hikes can lead to social unrest, making strategic communication and phased approaches critical. Property taxes, however, have an edge in this regard. When transparently managed and clearly linked to local benefits, they may face less resistance compared to more generalized national taxes.

To maximize the potential of property tax reforms, the IMF advocates for the integration of modern technology. Using tools such as satellite imagery, drones, and geographic information systems (GIS), local governments can map and assess property values more accurately, expanding tax coverage and enhancing efficiency. This strategy has proven effective in cities like Delhi and Bangalore, where such technologies have allowed for more precise property tracking and valuation.

For Nigeria, the IMF suggests a practical, phased approach to reform. Initially, municipalities could start with an area-based property tax system, which, although simpler, provides a foundation for gradual enhancement. As local technological and valuation capabilities improve, these municipalities could transition to a full value-based system, reflecting true property market values. This approach balances the need for immediate action with the complexities of overhauling tax systems.

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The IMF’s analysis reinforces that property tax reforms are more than just a tool for raising revenue—they are a pathway to sustainable economic stability. By allowing local governments to generate their own resources, property taxes reduce dependency on unpredictable national or external funding sources, providing a stable fiscal environment conducive to long-term planning and investment.

The IMF concluded that while implementing these changes comes with challenges, they are surmountable with the right strategies. Clear communication with the public about the benefits and purpose of these taxes, alongside the use of modern technology, can make property tax systems more effective and politically viable. For Nigeria, embracing such reforms could mean better public services, enhanced economic stability, and the fostering of inclusive growth, positioning the country on a stronger fiscal footing for years to come.

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